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Facing the future: towards a green economy for New Zealand
New Zealand would be advantaged by making a transition to a green economy, and is well Growth Research Trust “Pure Advantage” report55 'clean and green' and they became less keen on visiting the country and buying its products
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Page 1 Facing the future: towards a green economy for New Zealand | March 2014
Summary
This Emerging Issues paper
presents evidence from local and global trends suggesting that New Zealand should carefullyreview its direction of development, and discusses the potential for New Zealand to move towards a green economy. The
United Nations Environment Programme describes the core characteristics of a green economy as: low carbon, resource efficient and socially inclusive.
Global context
International science-based reports have identified challenges facing the planet that arise from the effects of human
activity on the environment. Many of these problems will impact on, or are already evident in, New Zealand (p2)
Lowering greenhouse gas emissions will require changes in patterns of production and consumption, but need not reduce wellbeing (p2)
Collaborative multi-stakeholder action is required as businesses, governments, and civil society alone do not have the
tools and the authority to tackle systemic risks (p2)New Zealand context
New Zealand's government and parliamentary bodies have highlighted the potential impacts of these social and
environmental challenges on New Zealand's industry, development and water quality, and the need for New Zealand to contribute to coordinated international action to reduce greenhouse gas emissions (p4-5)
New Zealand's potential for a green economy
New Zealand would be advantaged by making a transition to a green economy, and is well positioned to start now to
build on its existing strengthsNew Zealand has a strong competitive advantage in renewable energy systems, and has many opportunities for growing
low -carbon technologies and services (p5)A number of New Zealand organisations are undertaking initiatives that increase the efficiency of resource use (p5) Initiatives that support social inclusiveness, as exemplified by the land and water forum, have shown resilient and
sustainable solutions are more likely to be generated by collaborative processes that incorporate government, communities, businesses and individuals (p6)Implementing change
There is a need to engage the public and businesses in creating a vision for a resilient and prosperous future
New Zealand should establish strong research
collaborations to support green innovation, and foster ways to incentivise and grow the production of low-carbon goods and services, improve efficiency, and manage demand (p6)
Long-term investments are needed in innovation, trialling new approaches, and supporting collaborations, in areas such
as land use, energy supply and efficiency, transport and housing (p7-8)The path to a green economy requires a well-informed and stable policy environment, especially for issues at the
interface between economic development and environmental protection (p6)Introduction
Over the last century, the world entered a new era, theAnthropocene
1 , in which human consumption patterns have become a significant influence on the global environment. Changes include biodiversity loss, reduced quality of freshwater, ocean acidification, and a changing climate. They are evident at both global and local scales and represent threats to long-term sustainability and wellbeing. These are complex problems which needinnovative and strategic long-term thinking. The purpose of this paper is to increase awareness of the
changing global circumstances within which New Zealand must navigate its future. Drawing from policy reports of international and national organisations, and the peer- reviewed literature, this paper aims to encourage discussion amongst the policy, business, academic and wider communities to help shape a future that will safeguard New Zealand's social, economic and environmental wellbeing. Page 2 Facing the future: towards a green economy for New Zealand | March 2014Global Context
The context for this paper is defined by three recent publications: the Sulston Report, "People and the Planet" (2012) by the Royal Society of London 2 ; the report "GlobalRisks 2014" by the World Economic Forum
3 ; and the first part of the IPCC Fifth Assessment Report 4 , "Climate Change 2013: The Physical Science Basis". These reports identify a number of linked social and environmental challenges due to continuing growth in the global population, expansion of the middle-classes in developing countries, and increasing consumption of resources globally. Many of these challenges are evident in NewZealand.
The Sulston report examines the links between poverty, education, expanding populations and the growing demand for resources. It notes that the increasing rate of development of low and middle income countries is going to result in a rapid increase in the rate of consumption of the world's resources, including strategic materials and liquid fossil fuels. It concludes that unless consumption levels are reduced, and the global population stabilised, the global demand for resources will become unsustainable. The report argues that, to stabilise the global population, major improvements in resource use efficiency, and reducing the environmental impacts of economic activity, are needed to develop satisfying lifestyles for the 1.3 billion people living in extreme poverty. The Global Network of Science Academies 5 has endorsed the Sulston report and urged national and international policy makers to respond.The Global Risks 2014 report also analyses the
interconnections between risks to global stability and prosperity. It argues that unless the complex, systemic interactions between them are better understood, no reliable mitigation strategies can be devised. In particular, it examines marked income disparity, structurally high unemployment and underemployment and fiscal crises in key economies, the failure of climate change mitigation and adaptation and associated risks of severe weather events and water crises.The report notes there are no
necessary trade-offs between being economically competitive and being sustainable across nations 6 . A key message is that "Collaborative multi-stakeholder action is required as businesses, governments, or civil society alone do not have both the tools and the authority to tackle systemic risks." Other reports agree that climate change represents a profound challenge to human wellbeing at a global scale 7The IPCC Fifth Assessment Report concludes,
inter alia, that it is extremely likely human impacts are the dominantcause of observed global warming since the 1950s and that future surface temperatures will be largely
determined by cumulative global greenhouse gas (GHG) emissions. Moreover, the present trajectory for GHG emissions is incompatible 8 with the Copenhagen Accord for stabilising long-term climate change 9 which set a maximum global average temperature target of 2°C above pre-industrial levels. Staying within this limit will require tight constraints on GHG emissions 10 ,11 , as noted by the OECD 12 : "Although there are a number of possible trajectories for reaching the 2°C target, they all imply a reduction to zero of the net global greenhouse gas emissions in the second half of this century." These changes will require a significant transition in all aspects of energy supply and demand, including changes to investments and markets 13 . The International Energy Agency (IEA) considers that a significant fraction of existing fossil fuel reserves (particularly coal reserves) could not be consumed under the "450 scenario", but the economic burden arising from stranded assets would be limited 14 Estimates by the IEA indicate that global costs involved in a low-carbon transition would be minimised by early action (i.e. before 2020), whereas the cost of the necessary investments could at least triple if action were delayed to later decades 15 . For these reasons the IEA considers that growth in global energy-related CO 2 emissions will need to halt and start to reverse in the current decade. However, securing reductions in GHG emissions will be difficult without a supportive policy environment, as acknowledged by the Secretary-General of the OECD 16 : "Low-carbon technologies are facing an array of incumbent technologies that have a huge advantage based on vast investments over decades. Those investments are very profitable and easily attract new capital [and] the owners of these assets aren't going to take kindly to their value being impaired by policies designed to tackle climate change." Lowering emissions will require changes in patterns of production and consumption, but need not result in reduced wellbeing. Different nations already exhibit a wide range of GHG emissions per capita. While many with low emissions per capita have low levels of life- satisfaction, others, such as Switzerland, Israel and Sweden, have relatively low emissions along with high life- satisfaction (Figure 1). Most nations are actively working to reduce their GHG emissions, often as part of a wider package of activities to minimise exposure to the impacts of climate change and to increase resilience. The European Union Page 3 Facing the future: towards a green economy for New Zealand | March 2014